Non-insulin-dependent diabetes mellitus (type II) represents 80-90% of the human population with diabetes, and worldwide estimates approach 215 million sufferers by 2010. Current therapies for type II diabetes have inherent problems, and there remains a great need for more effective, orally administered agents that normalize both glucose and insulin levels. Insulin resistance in type II diabetes is associated with an elevation in protein-tyrosine phosphatase activity, particularly PTP1B, which dephosphorylates the insulin receptor (IR) and attenuates its tyrosine kinase activity. Studies on PTP1B knockout mice and vanadium-containing inhibitors suggest that a selective, orally active PTP1B inhibitor could be a major advance in the treatment of type II diabetes. Here, we disclose our efforts leading to novel 11-arylbenzo[b]naphtho[2,3-d]furans and 11-arylbenzo[b]naphtho[2,3-d]thiophenes as potent and selective PTP1B inhibitors that are orally active as antidiabetic agents. Compounds 6 and 7 were low nanomolar inhibitors of human PTP1B (hPTP1B IC50: 61 nM and 83 nM, respectively). In the ob/ob mouse model of diabetes, compound 6 (75 mg/kg/day, po) reduced plasma glucose by 50% and insulin by 85%, while compound 7 (25 mg/kg/day, po) lowered glucose by 42% and insulin by 86%. Compound 7 generally showed selectivities against other PTPases of greater than 25-fold. These compounds represent promising oral antidiabetic agents and are currently being further evaluated.